Shoe Zone said that its digital strategy and its Big Box stores turned in profitable first-half growth, providing a positive foundation for the rest of the year.
The value footwear retailer turned over £73m in the six months to March 30, slightly down on £73.7m a year ago. Digital sales were 4.9% up at £5m, up by 4.9%. Pre-tax profits of £1m were flat compared to last year, thanks to a profit contribution of £1.5m from digital. A positive contribution also came from its Big Box stores, part of an estate of 500 stores across the UK. The retailer is also trialling a ‘hybrid’ concept store that will take the look and feel of a Big Box store to high streets and shopping centres. While it’s early days for this scheme, Shoe Zone said in its statement that “initial results are encouraging”.
Nick Davis, Shoe Zone chief executive, said the first half of the year had been a positive one for the group. He added: “Our ongoing strategic focus continues to be on the Big Box roll out with a target of 45 stores by the end of December 2019. This is progressing to plan and we will be operating from 33 Big Box stores by the end of May.
“Additionally, our refreshed digital strategy has also generated profitable growth, laying the foundation for a positive outlook for the rest of the year. This good performance also reflects our close management of costs and ability to maintain appealing key price-points and multi-buy offers for our customers. Additionally, we have experienced lower administration costs due to careful control of property costs and beneficial reduction in foreign exchange.
“Trading momentum has continued into the second half, in line with market expectations. With our growth strategy in place, we believe we are favourably insulated against many of the structural sector issues and the board continues to look to the future with confidence.”
In the half-year, digital revenue grew by 4.9% to £5m, from £4.8m last time. The division also contributed £1.5m to profits – 19.9% more than last time. Shoe Zone’s focus is on growing its email database, and in the half-year it added more than 250,000 new customers, with 92% of new sign-ups taking place in store. That took its active database to 501,000. Coupled with a 42.3% rise in targeted email promotions, the impact of these messages is reflected in a 13.8% increase in email revenue.
At the same time the company has increased the product range that it sells exclusively online by 185% since October 2018, while revenue for the period has risen by 150%, year-on-year.
Image: Screenshot from Shoe Zone website/InternetRetailing Media